Indus Towers open to acquisitions in India for expansion

The company feels the sector could do with more consolidation after having seen the first such event with American Tower Corporation acquiring Viom Networks recently.Gulveen Aulakh | ET Bureau | Updated: May 06, 2016, 08:14 IST

Indus Towers, the world’s largest telecom tower provider, is open to acquisitions in the sector as it feels the sector could do with more consolidation after having seen the first such event with American Tower Corporation (ATC) acquiring Viom Networks recently.

The company, which closed the fiscal with nearly 120,000 towers, will focus on India rather than overseas for expansion and telcos will continue to need more towers as they aggressively launch 4G services.

The focus for acquisitions for the three-way joint venture between Bharti Airtel, Vodafone India and Idea Cellular will, however, be limited to towers where the growth has been continuous and core to its operations, the company’s new chief executive Bimal Dayal said, adding that it would not look at overseas for expansion since tower installations in the South Asian nation were still witnessing accelerated growth.

“There's enough and more happening here (in India). Earlier, we used to see action happening every year, now its every six months,” said Dayal, who took the helm at the tower provider last month, indicating at the pace of growth.

"Our current focus is towers and we're always exploring (for acquisition)… anything that fits in the overall plan of reducing time for rollouts and costs (would be opportune)," he added, without specifying the corpus that the company has set aside for acquisitions.

The tower provider is witnessing accelerated growth in 3G, 4G and even 2G installations over last year while it will seek out new opportunities in areas like smart cities.

India’s telecom tower industry with about 450,000 towers forms the backbone for carriers to offer voice and data services. The first consolidation in the sector happened in the last six months when American Tower Corporation (ATC) acquired Viom Networks in a Rs 7,600-crore deal, making the US-based company the second largest tower company after Indus. The deal closed in March.

Dayal said consolidation in the sector would increase competition and with signs of rentals not coming down, companies like Indus would have to offer additional services such as reduction of energy consumption using green solutions, new type of sites or even customized networks to telcos to stay competitive.

Having closed 2015-16 with 119,881 towers and 270,006 tenancies, a rise of 3.4% and 6.7% respectively over the previous year, Indus expects the growth to sustain as demand for towers has risen while concerns around EMF radiation have reduced.

The rising number of call drops in the industry has also lead to demand for towers, added chief sales and marketing officer Sameer Sinha.

The company recorded revenue ofRs 16,014 crore for the year ended March 2016, about 7% higher than its revenue of Rs 14,975 crore in the previous fiscal.